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vhtje
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Re: Virgin Atlantic needs government support?

Fri Apr 24, 2020 12:07 pm

VS11 wrote:
Here is the full interview with Delta CEO. The VS question is at the end at 14:15
https://www.cnbc.com/video/2020/04/22/d ... virus.html

Personally, I think if VS folds then the entire AA/BA JV is in danger of losing its anti-trust immunity, at least in regards to London, which is where the beef is.


Why? What mechanism is there for losing immunity that has been granted?

When it expires, and a re-application is made, sure, the new application can be denied, if the market conditions have significantly or sufficiently been altered so as to make the underpinning rationale for the original approval to now be invalid. But how much total TATL traffic (and I do mean total TATL, since this is the basis for the BA/IB/EI/AY/AA JV, not just ex-LON) did VS carry prior to COVID-19? If VS' contribution was low, it may not be enough to worry the DOT.
I only turn left when boarding aircraft. Well, mostly. All right, sometimes. OH OKAY - rarely.
 
VS11
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Re: Virgin Atlantic needs government support?

Fri Apr 24, 2020 12:32 pm

vhtje wrote:
VS11 wrote:
Here is the full interview with Delta CEO. The VS question is at the end at 14:15
https://www.cnbc.com/video/2020/04/22/d ... virus.html

Personally, I think if VS folds then the entire AA/BA JV is in danger of losing its anti-trust immunity, at least in regards to London, which is where the beef is.


Why? What mechanism is there for losing immunity that has been granted?

When it expires, and a re-application is made, sure, the new application can be denied, if the market conditions have significantly or sufficiently been altered so as to make the underpinning rationale for the original approval to now be invalid. But how much total TATL traffic (and I do mean total TATL, since this is the basis for the BA/IB/EI/AY/AA JV, not just ex-LON) did VS carry prior to COVID-19? If VS' contribution was low, it may not be enough to worry the DOT.


All it takes is an airline like JetBlue to challenge in court the decision of the US DoT. With the UK out of the EU and US-EU Open Skies, there is no reason why the entire TATL should be taken into account. If Virgin Atlantic and Norwegian are out of the picture, UK-US market comes down to 4 carriers. I doubt two of them will be allowed to act as one. The anti-trust protection is for the consumer. Collusion won’t be very difficult between effectively 3 carriers.
 
Galwayman
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Re: Virgin Atlantic needs government support?

Fri Apr 24, 2020 1:07 pm

O’Leary just slaughtered Branson in a Sky news interview , he was spot on ... let the tax dodger put his money where his mouth is
 
tphuang
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Re: Virgin Atlantic needs government support?

Fri Apr 24, 2020 1:54 pm

VS11 wrote:
vhtje wrote:
VS11 wrote:
Here is the full interview with Delta CEO. The VS question is at the end at 14:15
https://www.cnbc.com/video/2020/04/22/d ... virus.html

Personally, I think if VS folds then the entire AA/BA JV is in danger of losing its anti-trust immunity, at least in regards to London, which is where the beef is.


Why? What mechanism is there for losing immunity that has been granted?

When it expires, and a re-application is made, sure, the new application can be denied, if the market conditions have significantly or sufficiently been altered so as to make the underpinning rationale for the original approval to now be invalid. But how much total TATL traffic (and I do mean total TATL, since this is the basis for the BA/IB/EI/AY/AA JV, not just ex-LON) did VS carry prior to COVID-19? If VS' contribution was low, it may not be enough to worry the DOT.


All it takes is an airline like JetBlue to challenge in court the decision of the US DoT. With the UK out of the EU and US-EU Open Skies, there is no reason why the entire TATL should be taken into account. If Virgin Atlantic and Norwegian are out of the picture, UK-US market comes down to 4 carriers. I doubt two of them will be allowed to act as one. The anti-trust protection is for the consumer. Collusion won’t be very difficult between effectively 3 carriers.


JetBlue's complaint would happen regardless of whether or not VS existed. Frankly, VS going under does not change the picture, since the US/UK market would be down to 3 carriers after DY is out of picture: BA/AA, VS/DL, UA regardless of VS's status.
 
onwFan
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Re: Virgin Atlantic needs government support?

Fri Apr 24, 2020 2:08 pm

VS11 wrote:
vhtje wrote:
VS11 wrote:
Here is the full interview with Delta CEO. The VS question is at the end at 14:15
https://www.cnbc.com/video/2020/04/22/d ... virus.html

Personally, I think if VS folds then the entire AA/BA JV is in danger of losing its anti-trust immunity, at least in regards to London, which is where the beef is.


Why? What mechanism is there for losing immunity that has been granted?

When it expires, and a re-application is made, sure, the new application can be denied, if the market conditions have significantly or sufficiently been altered so as to make the underpinning rationale for the original approval to now be invalid. But how much total TATL traffic (and I do mean total TATL, since this is the basis for the BA/IB/EI/AY/AA JV, not just ex-LON) did VS carry prior to COVID-19? If VS' contribution was low, it may not be enough to worry the DOT.


All it takes is an airline like JetBlue to challenge in court the decision of the US DoT. With the UK out of the EU and US-EU Open Skies, there is no reason why the entire TATL should be taken into account. If Virgin Atlantic and Norwegian are out of the picture, UK-US market comes down to 4 carriers. I doubt two of them will be allowed to act as one. The anti-trust protection is for the consumer. Collusion won’t be very difficult between effectively 3 carriers.

Which other airport will have even this much competition coming out of covid as London? Most UA/LH and DL/AF/KL routes are going to be end up being absolute monoploies for the forseeable future.. On the other hand, most of the important routes to London are going to have 2-3 carriers each. If anything, the other two JVs are more dangerous to the customer.
 
Breathe
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Re: Virgin Atlantic needs government support?

Fri Apr 24, 2020 2:10 pm

Galwayman wrote:
O’Leary just slaughtered Branson in a Sky news interview , he was spot on ... let the tax dodger put his money where his mouth is

Indeed!

Where's a link to the Sky News article and video of the interview:

https://news.sky.com/story/coronavirus- ... r-11978098
 
VS11
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Re: Virgin Atlantic needs government support?

Fri Apr 24, 2020 2:17 pm

tphuang wrote:
VS11 wrote:
vhtje wrote:

Why? What mechanism is there for losing immunity that has been granted?

When it expires, and a re-application is made, sure, the new application can be denied, if the market conditions have significantly or sufficiently been altered so as to make the underpinning rationale for the original approval to now be invalid. But how much total TATL traffic (and I do mean total TATL, since this is the basis for the BA/IB/EI/AY/AA JV, not just ex-LON) did VS carry prior to COVID-19? If VS' contribution was low, it may not be enough to worry the DOT.


All it takes is an airline like JetBlue to challenge in court the decision of the US DoT. With the UK out of the EU and US-EU Open Skies, there is no reason why the entire TATL should be taken into account. If Virgin Atlantic and Norwegian are out of the picture, UK-US market comes down to 4 carriers. I doubt two of them will be allowed to act as one. The anti-trust protection is for the consumer. Collusion won’t be very difficult between effectively 3 carriers.


JetBlue's complaint would happen regardless of whether or not VS existed. Frankly, VS going under does not change the picture, since the US/UK market would be down to 3 carriers after DY is out of picture: BA/AA, VS/DL, UA regardless of VS's status.


Correct but the result could be different. Without VS, jetBlue can get free LHR slots from AA/BA. With VS, all JV's can be just dissolved resulting in 5 carriers and jetBlue having to find the LHR slots on its own.
 
fcogafa
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Re: Virgin Atlantic needs government support?

Fri Apr 24, 2020 4:18 pm

It will be interesting to see how long the 80% use it or lose it slot relief is maintained. Many of the airlines, particually BA will not be able to use all of their LHR slots for some time. Will slots suddenly become available, a couple of airlines such as Rwandair have already taken the opportunity to operate from LHR rather than LGW. The Virgin slots have already been 'monetised' so the current owners of these slots will want to get as much as possible for them in the event of Virgin closing, so it won't be a case of them simply going back into the pot.
Last edited by fcogafa on Fri Apr 24, 2020 4:19 pm, edited 1 time in total.
 
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atcsundevil
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Re: Virgin Atlantic needs government support?

Fri Apr 24, 2020 5:12 pm

Let's please try to keep the discussion on topic. The discussion is regarding the current financial situation of Virgin Atlantic. To discuss other aspects of Virgin Atlantic or past issues with the company, please either find or create a more appropriate thread for that discussion.

✈️ atcsundevil
 
Johnwaynebobbet
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Re: Virgin Atlantic needs government support?

Fri Apr 24, 2020 9:18 pm

fcogafa wrote:
It will be interesting to see how long the 80% use it or lose it slot relief is maintained. Many of the airlines, particually BA will not be able to use all of their LHR slots for some time. Will slots suddenly become available, a couple of airlines such as Rwandair have already taken the opportunity to operate from LHR rather than LGW. The Virgin slots have already been 'monetised' so the current owners of these slots will want to get as much as possible for them in the event of Virgin closing, so it won't be a case of them simply going back into the pot.


BA and IAG wont lose any slots at all, any thinking otherwise is deluded. They will start flying deadhead flights to save them. Also this is all IIRc covered by EU directives and once December comes the UK should have left so it become irrelevant.
 
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PepeTheFrog
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Michael O'Leary: Virgin Atlantic is ridicules

Fri Apr 24, 2020 9:40 pm

Michael O'Leary has some sharp words to share regarding Virgin Atlantic:

"This is Branson's second go at trying to fleece the British taxpayer for state aid.
"Now you have Virgin Atlantic owned by Delta and a Caribbean island-based non-resident billionaire".


Video: https://news.sky.com/story/coronavirus- ... r-11978098

So why is MOL doing this, does he like to be a troll??
Good moaning!
 
enplaned
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Re: Michael O'Leary: Virgin Atlantic is ridicules

Fri Apr 24, 2020 10:04 pm

Can you tell us what you think is wrong or objectionable about what O'Leary is saying? The word "fleece" is emotive, but there's no question that Branson is not a UK resident and that 49% of Virgin Atlantic is owned by Delta.
 
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PepeTheFrog
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Re: Michael O'Leary: Virgin Atlantic is ridicules

Fri Apr 24, 2020 10:07 pm

enplaned wrote:
Can you tell us what you think is wrong or objectionable about what O'Leary is saying?.


My question is: why is MOL saying it in the first place? Doesn't he has better things to do, like running a airline?
Good moaning!
 
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Dutchy
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Re: Michael O'Leary: Virgin Atlantic is ridicules

Fri Apr 24, 2020 10:20 pm

PepeTheFrog wrote:
enplaned wrote:
Can you tell us what you think is wrong or objectionable about what O'Leary is saying?.


My question is: why is MOL saying it in the first place? Doesn't he has better things to do, like running a airline?


Because Ryanair will not get the same government support legacies are getting (and Virgin Atlantic). Without state support, KLM/AirFrance would be gone, the Lufthansa group would be gone, AIG (BA and Iberia) I do not know maybe. So Mol sees his competitors getting subsidies/government aid and he does not want these companies to survive. One. way of pulling the rug underneath these airlines is playing on the emotions and thus persuading the general public not to give support. If he succeeds, he will have a lot less competitors in Europe, thus more profit for Ryanair. He is playing the long game, and this will go on for a while, so the next round of government support will be near.

Anyhow, Ryanair is much batter placed, much more cash, much better profitability in normal times and much more flexible without high wages. So Ryanair will weather it out for a long time.
So yes, I think he actually has a point this time. But at the same time, he is also a hypocrite, Ryanair has grown massively because of subsidies to fly to regions/cities underserved by airlines.
Many happy landings, greetings from The Netherlands!
 
Dmoney
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Re: Virgin Atlantic needs government support?

Fri Apr 24, 2020 10:21 pm

Michael O'Leary pays his taxes and is tax resident in Ireland. He's certainly not always right but he does have a tendency to call bullshit.

Branson can go jump off a bridge the tax dodging narcissist. If I walked into a credit committee asking for incremental facility for Virgin Atlantic I'd never get a promotion
again.

Why should Deliveroo workers on bikes risking their lives everyday without any kind of insurance pay tax to bailout a billionaire. Virgin was a zombie company going into this kept alive by low interest rates as they've never consistently earned a return on capital which justifies their existence.

Not every company gets to exist just because you like their beds or planes or whatever. You cannot justify a bailout of VS in a market economy. If you were super worried about suppliers then the state could buy it a for a pound a do a debt equity swap. But the first call should always be the equity sponsor. If they don't want to stump up then you find another route.
 
Galwayman
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Re: Virgin Atlantic needs government support?

Fri Apr 24, 2020 10:24 pm

Fleece is the perfect word . O’Leary nailed it perfectly , Branson wants to fleece the tax payer without putting his hands in his own pocket
 
Dmoney
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Re: Michael O'Leary: Virgin Atlantic is ridicules

Fri Apr 24, 2020 10:27 pm

Anyhow, Ryanair is much batter placed, much more cash, much better profitability in normal times and much more flexible without high wages. So Ryanair will weather it out for a long time.
So yes, I think he actually has a point this time. But at the same time, he is also a hypocrite, Ryanair has grown massively because of subsidies to fly to regions/cities underserved by airlines.[/quote]


Sorry that's horseshit Dutch. The EU commission is incredibly tough on state aid. Ryanair hasn't got a penny in state aid as they were forced to repay abatements in France and elsewhere. All agreements are purely commerical. Ryanair don't fly any regional PSO routes either.

Of course those other companies should go bankrupt! When did you all become neo-Marxists like myself or do you only believe in socialism for the rich?

It used to be that you ran a conservative balance sheet or you went bankrupt and if you did run a conservative balance sheet then you got to pickup your rivals for pennys on the dollar when they collapsed during a recession. Stop being hypocritical people, it's either a market economy or not.
 
GDB
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Re: Virgin Atlantic needs government support?

Fri Apr 24, 2020 10:49 pm

BA said at the start of this, they saw the situation as very serious of course but had cash reserves. Initially, prior to the governments support scheme, the 80/20 one for wages up to £2500 per month, they were going to encourage staff who can, to take unpaid leave not unlike the response to the 2008/9 bankers crash. This is still available.
Worst case, there might be redundancies if it went on for an extended period.
(In the same period, didn't tax dodger Dickie just tell his staff to take 2 months unpaid like it or not? Luckily for them they are covered by the scheme now. So you can argue he is already getting government help).

I was also told that BA had been told by the government that they are seen as an essential industry, don't think that applies to VS.
That did not mean an outright bail out however, it had to be an ultimately viable business.
 
NWADTWE16
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Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 12:16 am

Ill never understand this group here. Always rooting for failure, always supporting huge, monopolistic companies that provide shite service , many times at high fares as well. Certainly if the wishes of the mob here come true, youll be paying 5x normal fare for the privilege of a torturous BA opportunity. Anyone want RyanAir to take over the world??? come on, get your heads out of ***********
I haven't been everywhere, but it's on my list!
 
Lablade
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Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 12:30 am

What happens to the tickets held by customers in the UK if VS goes under.
 
skipness1E
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Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 12:35 am

What routes will BA(/AA) have to themselves if Virgin collapse? Only LHR-MIA I think? The rest all have some serious competition.
 
Ishrion
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Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 12:39 am

skipness1E wrote:
What routes will BA(/AA) have to themselves if Virgin collapse? Only LHR-MIA I think? The rest all have some serious competition.


BA will gain SEA-LHR to themselves but have indirect competition from Norwegian at Gatwick (assuming they don't collapse).

BA will also have LHR-LAS to themselves.
 
onwFan
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Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 1:57 am

Ishrion wrote:
skipness1E wrote:
What routes will BA(/AA) have to themselves if Virgin collapse? Only LHR-MIA I think? The rest all have some serious competition.


BA will gain SEA-LHR to themselves but have indirect competition from Norwegian at Gatwick (assuming they don't collapse).

BA will also have LHR-LAS to themselves.

Surely, DL will takeover the SEA-LHR route even if it means at the expense of SLC/PDX-LHR. Also, LHR-LAS was only a recent addition by VS by moving it over from LGW.
 
BA777FO
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Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 7:09 am

Dmoney wrote:
Why should Deliveroo workers on bikes risking their lives everyday without any kind of insurance pay tax to bailout a billionaire. Virgin was a zombie company going into this kept alive by low interest rates as they've never consistently earned a return on capital which justifies their existence.


Why should a Virgin pilot missing out on several nights of sleep every month, missing family births/birthdays, weddings, funerals etc, having paid £100,000+ for the privilege of gaining their licences, pay tax to top up the housing benefit or child tax credits of the Deliveroo driver? Or universal credit for the workshy? This is not a bailout of a billionaire (whose fortune is tied up in largely illiquid shares of the Virgin group - he's not sitting on a pile of cash) but a bailout of 8,500 ordinary workers all paying their taxes like your deliveroo driver. Some of those people will never be able to gain employment at the same salary again in their careers. The government will miss the tax revenue of those 8,500 Virgin staff and the hundreds of millions of APD from Virgin passengers. When does it become a zero-sum game?

Dmoney wrote:
You cannot justify a bailout of VS in a market economy. If you were super worried about suppliers then the state could buy it a for a pound a do a debt equity swap. But the first call should always be the equity sponsor. If they don't want to stump up then you find another route.


That's basically what the government has told them before they come back and ask for a state loan. Ultimately I think the government is unlikely to offer it to them based on the same reason they didn't give one to Flybe, Thomas Cook or Monarch: they have no collateral to secure the loans against. However, this downturn isn't just part of the natural business cycle, this is an extraordinary circumstance that virtually no one had planned for, not even government pandemic responses!

As for the BA/AA monopoly in the event of a Virgin collapse, there are more than just LHR-MIA without direct competition, but one-stop competition exists on every BA longhaul route where there's not direct competition. Should I be outraged that Delta has Indianapolis-Paris or Tampa-Amsterdam to themselves? London might be a big market, but Virgin (and even Norwegian) has shown that turning a profit isn't easy. London has suffered from over capacity for quite some time.
 
jomur
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Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 10:21 am

I wonder if SRB remembers 2008/9 when he said the UK Government should not bail out BA when they where losing money? He basically said it should just fail. Maybe he should follow his own words now....
 
jomur
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Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 10:49 am

BA777FO wrote:

Why should a Virgin pilot missing out on several nights of sleep every month, missing family births/birthdays, weddings, funerals etc, having paid £100,000+ for the privilege of gaining their licences, pay tax to top up the housing benefit or child tax credits of the Deliveroo driver? Or universal credit for the workshy? This is not a bailout of a billionaire (whose fortune is tied up in largely illiquid shares of the Virgin group - he's not sitting on a pile of cash) but a bailout of 8,500 ordinary workers all paying their taxes like your deliveroo driver. Some of those people will never be able to gain employment at the same salary again in their careers. The government will miss the tax revenue of those 8,500 Virgin staff and the hundreds of millions of APD from Virgin passengers. When does it become a zero-sum game?


If the Government lends Virgin the money with no security and it goes bust then the Government will lose more than what it would have gained from the taxes from Virgin and its staff. Virgin would have to downsize anyway to survive regardless of any loans. APD income will be down in the short to near future anyway.
The Government is helping Virgin's employees by the furlough scheme which without it quite a few would already be out of a job. The vast majority of Virgins employees are not pilots so didn't spend £100,000 to learn how to fly or earn anywhere near the same. The vast majority of UK taxpayers couldn't care less if Virgin Atlantic survive or not.
 
a350lover
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Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 11:02 am

Virgin is the second legacy player in the UK, they are milles away from BA in terms of connectivity and I'd say the same when it comes to compare the number of Virgin employees or passengers. Before coronavirus, it was already a very challenging time for those "second players" in Europe. Now it's almost impossible to remain competitive with the current scenario, and I'd say all Governments are going to provide the industry with some indirect benefits but they won't help all airlines in the same level. I can't think of any EU country with more than just one "legacy" carrier. Is there any other example nearby?

I can think of Air Europa in Spain, which isn't exactly a legacy carrier, but still offers full-service so competes pretty much in the same league as Iberia. If IAG hand't shown interest for them before this crisis, they would be now in pretty much the same situation Virgin is.
 
tobsw
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Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 11:33 am

a350lover wrote:
Virgin is the second legacy player in the UK, they are milles away from BA in terms of connectivity and I'd say the same when it comes to compare the number of Virgin employees or passengers. Before coronavirus, it was already a very challenging time for those "second players" in Europe. Now it's almost impossible to remain competitive with the current scenario, and I'd say all Governments are going to provide the industry with some indirect benefits but they won't help all airlines in the same level. I can't think of any EU country with more than just one "legacy" carrier. Is there any other example nearby?

I can think of Air Europa in Spain, which isn't exactly a legacy carrier, but still offers full-service so competes pretty much in the same league as Iberia. If IAG hand't shown interest for them before this crisis, they would be now in pretty much the same situation Virgin is.


There's a massive difference between Air Europa and Virgin Altantic. Air Europa has been consistently profitable in the last decade. Virgin Atlantic, not.
 
MIflyer12
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Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 11:46 am

NWADTWE16 wrote:
Ill never understand this group here. Always rooting for failure, always supporting huge, monopolistic companies that provide shite service , many times at high fares as well. Certainly if the wishes of the mob here come true, youll be paying 5x normal fare for the privilege of a torturous BA opportunity. Anyone want RyanAir to take over the world??? come on, get your heads out of ***********


Coming at this a little differently, I don't understand the hostility to partial foreign ownership - some people were willing to invest in UK businesses (at greater levels than UK citizens would). The UK wouldn't have an auto industry with foreign direct investment (American Ford, French PSA, German Mini/Rolls, Japanese Toyota, German Bentley). Look at FDI in UK power generation. There certainly are more examples. If foreign investors don't stand on footing equal to 'locally' owned firms they'll put their money elsewhere - and the UK will be worse off for it. It's the same thing with Virgin Australia.

If you don't want foreign investment, lots of smaller markets will get nothing but government-owned national carriers - you've undone four decades of market liberalization that vastly increased routes and passenger counts while also lowering fares.
 
Galwayman
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Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 12:12 pm

tobsw wrote:
a350lover wrote:
Virgin is the second legacy player in the UK, they are milles away from BA in terms of connectivity and I'd say the same when it comes to compare the number of Virgin employees or passengers. Before coronavirus, it was already a very challenging time for those "second players" in Europe. Now it's almost impossible to remain competitive with the current scenario, and I'd say all Governments are going to provide the industry with some indirect benefits but they won't help all airlines in the same level. I can't think of any EU country with more than just one "legacy" carrier. Is there any other example nearby?

I can think of Air Europa in Spain, which isn't exactly a legacy carrier, but still offers full-service so competes pretty much in the same league as Iberia. If IAG hand't shown interest for them before this crisis, they would be now in pretty much the same situation Virgin is.


There's a massive difference between Air Europa and Virgin Altantic. Air Europa has been consistently profitable in the last decade. Virgin Atlantic, not.


Well said .

There is no way on Earth that VS comes close to the success and importance of Air Europa- The Virgin marketing machine has a massive ego and considers it’s self way more significant and important than it is .

At the end of the day VS is a financially unviable boutique airline of marginal interest to Delta’s global strategy .
 
Opus99
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Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 12:29 pm

Galwayman wrote:
tobsw wrote:
a350lover wrote:
Virgin is the second legacy player in the UK, they are milles away from BA in terms of connectivity and I'd say the same when it comes to compare the number of Virgin employees or passengers. Before coronavirus, it was already a very challenging time for those "second players" in Europe. Now it's almost impossible to remain competitive with the current scenario, and I'd say all Governments are going to provide the industry with some indirect benefits but they won't help all airlines in the same level. I can't think of any EU country with more than just one "legacy" carrier. Is there any other example nearby?

I can think of Air Europa in Spain, which isn't exactly a legacy carrier, but still offers full-service so competes pretty much in the same league as Iberia. If IAG hand't shown interest for them before this crisis, they would be now in pretty much the same situation Virgin is.


There's a massive difference between Air Europa and Virgin Altantic. Air Europa has been consistently profitable in the last decade. Virgin Atlantic, not.


Well said .

There is no way on Earth that VS comes close to the success and importance of Air Europa- The Virgin marketing machine has a massive ego and considers it’s self way more significant and important than it is .

At the end of the day VS is a financially unviable boutique airline of marginal interest to Delta’s global strategy .

I could not agree more.
 
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adambrau
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Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 1:30 pm

jomur wrote:
If the Government lends Virgin the money with no security and it goes bust then the Government will lose more than what it would have gained from the taxes from Virgin and its staff. Virgin would have to downsize anyway to survive regardless of any loans. APD income will be down in the short to near future anyway.
The Government is helping Virgin's employees by the furlough scheme which without it quite a few would already be out of a job. The vast majority of Virgins employees are not pilots so didn't spend £100,000 to learn how to fly or earn anywhere near the same. The vast majority of UK taxpayers couldn't care less if Virgin Atlantic survive or not.


Perhaps it's true most UK Taxpayers couldn't care less about what happens to VS. From a different perspective, maybe many American, SkyTeam and Virgin Holidays passengers might care more VS if it can't survive this storm, not to mention staff. Not saying the UK Taxpayer should solely foot the bill for VS. SRB has to be able to man up some collateral to save one of his 'first' Virgins. I suspect there are a lot of discussions going on.
JFK Friendly
 
a350lover
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Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 1:52 pm

I agree Virgin is a nice second player only if it is capable to be in the market by itself. I think we can agree on their marketing is nice and so is the product. It's much more aspirational for many than BA is maybe. Despite all that, these are not reasons important enough to receive public investment these days...
 
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vhtje
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Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 1:59 pm

Interesting development. The ex-COO of Flybe, Luke Farajallah, says Michael O'Leary is 'spot on':

https://www.lbc.co.uk/radio/presenters/andrew-castle/branson-michael-oleary-spot-on-virgin-bailout/

He uses more measured language, but his message is that frail airlines - that is, airlines with little or no liquidity - should not be saved by Government money.
I only turn left when boarding aircraft. Well, mostly. All right, sometimes. OH OKAY - rarely.
 
BA777FO
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Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 2:14 pm

jomur wrote:
BA777FO wrote:

Why should a Virgin pilot missing out on several nights of sleep every month, missing family births/birthdays, weddings, funerals etc, having paid £100,000+ for the privilege of gaining their licences, pay tax to top up the housing benefit or child tax credits of the Deliveroo driver? Or universal credit for the workshy? This is not a bailout of a billionaire (whose fortune is tied up in largely illiquid shares of the Virgin group - he's not sitting on a pile of cash) but a bailout of 8,500 ordinary workers all paying their taxes like your deliveroo driver. Some of those people will never be able to gain employment at the same salary again in their careers. The government will miss the tax revenue of those 8,500 Virgin staff and the hundreds of millions of APD from Virgin passengers. When does it become a zero-sum game?


If the Government lends Virgin the money with no security and it goes bust then the Government will lose more than what it would have gained from the taxes from Virgin and its staff. Virgin would have to downsize anyway to survive regardless of any loans. APD income will be down in the short to near future anyway.
The Government is helping Virgin's employees by the furlough scheme which without it quite a few would already be out of a job. The vast majority of Virgins employees are not pilots so didn't spend £100,000 to learn how to fly or earn anywhere near the same. The vast majority of UK taxpayers couldn't care less if Virgin Atlantic survive or not.


I was making a very specific response to the Deliveroo driver contribution to the Treasury.

As for the cost to the Treasury - £500m. BA alone pays ~£700m each year in employer related taxes alone. I appreciate BA has 4 times the number UK based employees but if you add the income tax and VAT those employees would pay and subtract the cost of universal credit from those 8,500 even if virgin went bust after 12 months the government would recoup its money.

That said, after Monarch, Thomas Cook and Flybe went bust I can't see this anti-aviation government stepping in to save the day.
 
Opus99
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Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 2:23 pm

vhtje wrote:
Interesting development. The ex-COO of Flybe, Luke Farajallah, says Michael O'Leary is 'spot on':

https://www.lbc.co.uk/radio/presenters/andrew-castle/branson-michael-oleary-spot-on-virgin-bailout/

He uses more measured language, but his message is that frail airlines - that is, airlines with little or no liquidity - should not be saved by Government money.

I don't know how people come back and still argue with this view point. That video is exactly the reason you should not give VS a loan of any kind. Look at wizz, ryanair, BA run extremely efficiently and have built extreme resilience over the years. they CAN withstand the pressure in times like this when costs are dramatically reduced but at the same time little revenue coming in. And i also appreciate his point that businesses should be run how people run their lives...you build up cash reserves for times that are not so good as well and Virgin did not because they were unable to because it was inefficiently run, they are the first to specifically beg for money in the UK aviation space. Easyjet being investment grade was able to tap into general government facilities also shows that its financially strong because of the same ability to run airlines efficiently.

One thing i've noticed is the airlines who come across to the consumer as 'cost-cutting' but are really just efficient will be the ones standing.

And it says a lot that if indeed costs are dramatically reduced YET you can't hold on for a few months says to me that this business was running on the skin of its teeth like it always has and that does not sound like a successful business to me.

Just let it go
 
JibberJim
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Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 2:40 pm

Lablade wrote:
What happens to the tickets held by customers in the UK if VS goes under.


They're unsecured creditors, so bottom of the pile (well above Delta/Branson) - however they'll likely be covered by other things - such as credit card insurance, if it's part of a package holiday, that protection, their own travel insurance etc. So for most people they will likely not be out of pocket.
 
bennett123
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Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 5:22 pm

Not disputing what Mr Farajallah says, but let us not forget that he is not an impartial witness.
 
DobboDobbo
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Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 5:30 pm

Galwayman wrote:
At the end of the day VS is a financially unviable boutique airline of marginal interest to Delta’s global strategy .


An embarrassingly inaccurate statement...
 
DobboDobbo
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Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 5:43 pm

Many if the comments on here advocating VS be “let go” are either born from personal prejudice / bias, a narrow view of the reality of running a business, or a wilful ignorance to the reality of how the present situation has (or will) torpedo hundreds of thousands of viable businesses the world over.

If you are willing to accept VS be “let go” so that it doesn’t make it to the other side of this crisis, you are, by default, accepting that the UK, the EU, and the World endures an economic depression the likes of which has never been seen in living memory.

It is important that businesses that are viable absent Coronavirus make it to through this so that the world can bounce back as quickly as possible.

The willingness to seemingly accept unprecedented economic hardship for the sake of a narrow point of view is baffling to say the least...
 
Opus99
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Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 6:08 pm

DobboDobbo wrote:
Many if the comments on here advocating VS be “let go” are either born from personal prejudice / bias, a narrow view of the reality of running a business, or a wilful ignorance to the reality of how the present situation has (or will) torpedo hundreds of thousands of viable businesses the world over.

If you are willing to accept VS be “let go” so that it doesn’t make it to the other side of this crisis, you are, by default, accepting that the UK, the EU, and the World endures an economic depression the likes of which has never been seen in living memory.

It is important that businesses that are viable absent Coronavirus make it to through this so that the world can bounce back as quickly as possible.

The willingness to seemingly accept unprecedented economic hardship for the sake of a narrow point of view is baffling to say the least...

This is reaching. Nobody is accepting economic hardship. The airline has not been struggling for years even at aviations peak and you want to throw money at it now? If virgin asked you to invest in it now, would you? Please. This business is weak and everyone knows it. It was viable the government would not have sent them back after being unimpressed by their bid
 
Johnwaynebobbet
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Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 7:41 pm

If VS are a viable business then a bank will be willing to lend them the money.
 
DobboDobbo
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Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 9:05 pm

Johnwaynebobbet wrote:
If VS are a viable business then a bank will be willing to lend them the money.


That statement is not relevant to the issue.

I think you have to separate what is a viable business in normal times (which VS is/was) and what is a viable business in the current times (which no airline is if this continues).

You also need to separate the role of a bank and the role of the government.
 
Opus99
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Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 9:09 pm

DobboDobbo wrote:
Johnwaynebobbet wrote:
If VS are a viable business then a bank will be willing to lend them the money.


That statement is not relevant to the issue.

I think you have to separate what is a viable business in normal times (which VS is/was) and what is a viable business in the current times (which no airline is if this continues).

You also need to separate the role of a bank and the role of the government.

It was not in normal times though. That’s the point. A viable business is one that is able to sustain profits over a long period of time. It was once viable but for the past 10 years it has not. Why do you think Singapore sold their stake? The investment underperformed. Delta needed them to grow their UK presence. They owe virgin about 200M from their JV not even from the dividend profits because there are none. This is not a viable business please. Or does delta make any money from actually owning the business? Or just from the fees of the JV?
Last edited by Opus99 on Sat Apr 25, 2020 9:11 pm, edited 1 time in total.
 
DobboDobbo
Posts: 1113
Joined: Thu Mar 03, 2016 1:02 am

Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 9:10 pm

Opus99 wrote:
DobboDobbo wrote:
Many if the comments on here advocating VS be “let go” are either born from personal prejudice / bias, a narrow view of the reality of running a business, or a wilful ignorance to the reality of how the present situation has (or will) torpedo hundreds of thousands of viable businesses the world over.

If you are willing to accept VS be “let go” so that it doesn’t make it to the other side of this crisis, you are, by default, accepting that the UK, the EU, and the World endures an economic depression the likes of which has never been seen in living memory.

It is important that businesses that are viable absent Coronavirus make it to through this so that the world can bounce back as quickly as possible.

The willingness to seemingly accept unprecedented economic hardship for the sake of a narrow point of view is baffling to say the least...

This is reaching. Nobody is accepting economic hardship. The airline has not been struggling for years even at aviations peak and you want to throw money at it now? If virgin asked you to invest in it now, would you? Please. This business is weak and everyone knows it. It was viable the government would not have sent them back after being unimpressed by their bid


If you let businesses fail because of Covid-19, you are accepting that there will be significant and painful economic hardship.

The relevant question is whether it is viable in the long run, in a non Covid world. That is what the government will be assessing, and that is what VS will have to demonstrate. The government plainly think it is viable, otherwise they would have not told them to come back.

Realistically, if any airline asked me to invest now, I wouldn’t do it unless it had state backing.
 
Opus99
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Joined: Thu May 30, 2019 10:51 pm

Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 9:14 pm

DobboDobbo wrote:
Opus99 wrote:
DobboDobbo wrote:
Many if the comments on here advocating VS be “let go” are either born from personal prejudice / bias, a narrow view of the reality of running a business, or a wilful ignorance to the reality of how the present situation has (or will) torpedo hundreds of thousands of viable businesses the world over.

If you are willing to accept VS be “let go” so that it doesn’t make it to the other side of this crisis, you are, by default, accepting that the UK, the EU, and the World endures an economic depression the likes of which has never been seen in living memory.

It is important that businesses that are viable absent Coronavirus make it to through this so that the world can bounce back as quickly as possible.

The willingness to seemingly accept unprecedented economic hardship for the sake of a narrow point of view is baffling to say the least...

This is reaching. Nobody is accepting economic hardship. The airline has not been struggling for years even at aviations peak and you want to throw money at it now? If virgin asked you to invest in it now, would you? Please. This business is weak and everyone knows it. It was viable the government would not have sent them back after being unimpressed by their bid


If you let businesses fail because of Covid-19, you are accepting that there will be significant and painful economic hardship.

The relevant question is whether it is viable in the long run, in a non Covid world. That is what the government will be assessing, and that is what VS will have to demonstrate. The government plainly think it is viable, otherwise they would have not told them to come back.

Realistically, if any airline asked me to invest now, I wouldn’t do it unless it had state backing.

That’s a good question. And the answer is no because they were not in a pre covid world. Can’t imagine they will for the next 5 years. If you can’t sustain profits in record traveler numbers, how do you plan to do so in even lower numbers. They can’t pay back that loan. even if they give them that loan they will eventually drain that cash and be back to square one. Following Asia’s example. They are operating at 50-60% load factor and they seem to be have plateaued there for now. Virgin was operating at 80% load factor before covid 19. I mean let’s be real here

But I get your point and it will be naive to say there won’t be though. Recovery in passenger numbers will take at least 2-3 years
Last edited by Opus99 on Sat Apr 25, 2020 9:20 pm, edited 1 time in total.
 
DobboDobbo
Posts: 1113
Joined: Thu Mar 03, 2016 1:02 am

Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 9:17 pm

*rolls eyes*
 
jomur
Posts: 344
Joined: Sun Jun 19, 2016 6:36 pm

Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 9:34 pm

DobboDobbo wrote:
Opus99 wrote:
DobboDobbo wrote:
Many if the comments on here advocating VS be “let go” are either born from personal prejudice / bias, a narrow view of the reality of running a business, or a wilful ignorance to the reality of how the present situation has (or will) torpedo hundreds of thousands of viable businesses the world over.

If you are willing to accept VS be “let go” so that it doesn’t make it to the other side of this crisis, you are, by default, accepting that the UK, the EU, and the World endures an economic depression the likes of which has never been seen in living memory.

It is important that businesses that are viable absent Coronavirus make it to through this so that the world can bounce back as quickly as possible.

The willingness to seemingly accept unprecedented economic hardship for the sake of a narrow point of view is baffling to say the least...

This is reaching. Nobody is accepting economic hardship. The airline has not been struggling for years even at aviations peak and you want to throw money at it now? If virgin asked you to invest in it now, would you? Please. This business is weak and everyone knows it. It was viable the government would not have sent them back after being unimpressed by their bid


If you let businesses fail because of Covid-19, you are accepting that there will be significant and painful economic hardship.

The relevant question is whether it is viable in the long run, in a non Covid world. That is what the government will be assessing, and that is what VS will have to demonstrate. The government plainly think it is viable, otherwise they would have not told them to come back.

Realistically, if any airline asked me to invest now, I wouldn’t do it unless it had state backing.


If the Government thought Virgin would make money and repay a loan they would have given them one already. Virgin hasn't ticked all the boxes so the Government said basically go and revise your plans and they want Virgin to be realistic in it's forecasts, Virgin still reckoned they could make a profit next year even now according to rumours.
 
seansasLCY
Posts: 1093
Joined: Mon Mar 19, 2007 5:25 am

Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 9:43 pm

https://www.telegraph.co.uk/business/20 ... 1587846955

According to the Telegraph:
“ Sir Richard Branson is seeking a buyer for Virgin Atlantic and has set an end-of-May deadline to save the airline from collapse after a taxpayer bailout proved beyond his reach.

The Sunday Telegraph has learnt that the pursuit of a £500m government package has been effectively shelved and that the airline is now focused on securing new private investment in the shadow of potential insolvency.”

“ Those interested in rescuing Virgin Atlantic are understood to include Lansdowne Partners, the hedge fund founded by George Osborne’s best man Peter Davies, Singapore sovereign wealth fund Temasek and Northill Capital, the fund that is backed by Italian-born Swiss Ernesto Bertarelli.”
 
Opus99
Posts: 811
Joined: Thu May 30, 2019 10:51 pm

Re: Virgin Atlantic needs government support?

Sat Apr 25, 2020 9:45 pm

https://www.bloomberg.com/news/articles ... -telegraph

Well would you look at that. If by the end of May they don’t secure something. Virgin is done...according to Branson
Last edited by Opus99 on Sat Apr 25, 2020 9:52 pm, edited 1 time in total.

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